Commodities Rule of Thumb
I have been looking for the last half hour for the "Rule of Thumb" that farmers are suppose to use when figuring out what crops they are going to plant for the next season.
I just found it:
1:2:3:5:5
1- Oats
2- Corn
3- Wheat
5- Soybeans
5- Cotton
The current prices for December 08 are:
Oats 336
Corn 484
Wheat 866
Soybeans 1167
Cotton 74
So the prices based on corn should now be:
Oats 242
Corn 484
Wheat 726
Soybeans 1210
Cotton 121.0
So according to the ratios, Oats are high by 94, (27%)
Wheat is low by 140 (16%)
Soybeans are low by 43
And cotton is low by 47 (63%)
The commodity that is the farthest off is Cotton, so I am buying cotton and holding it until either the other commodities come down, or cotton goes up.
